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Background and Objective: Hot pepper is an economically important spice that is widely cultivated and consumed in Ethiopia. In spite of its wide importance, there is no/few information available on molecular genetic diversity of this crop and less attention has been given for its improvement. Cultivars characterization is an important link between the conservation and utilization of plant genetic resources in various breeding programmes. The present experiment was conducted to determine the amount of genetic diversity of Ethiopian hot peppers cultivars using ISSR markers. Materials and Methods: The experimental site was located at Wolkite, Southern Nation and Nationalities Peoples (SNNPs), Ethiopia. Ten Seeds were randomly selected from each accession and planted in glasshouse of Wolkite University. Watering was done once a day and after a month, healthy and young leaves were randomly collected, dried in silica gel and used for DNA extraction and further analysis. Results: Using five ISSR primers, a total of 37 scorable bands were generated of which 35 (94.6%) were polymorphic. Within population diversity based on polymorphic bands ranged from 51.35-91.89% with a mean of 66.6%, Nei’s genetic diversity of 0.19-0.30 with a mean of 0.28 and Shannon information index of 0.29-0.45 with a mean of 0.43. With all diversity parameters, the highest diversity was obtained from amhara2 populations, whilst the lowest was from Oromia2. From Jaccard’s pairwise similarity coefficient, Oromia1 and Oromia2 were most related populations exhibiting 0.956 similarity and Semen omo and Amhara2 were the most distantly related populations with similarity of 0.827. Clustering was showed that there is strong correlation between geographic distance and genetic diversity of Ethiopian hot peppers cultivars because geographically closely related species have been clustered together. Conclusion: Amhara2 populations (from west Gojjam and north Gonder) exhibited the highest genetic diversity so that the populations should be considered as the primary sites in designing conservation areas for this crop. Further, it was suggested that molecular markers are valid tags for the assessment of genetic diversity in Capsicum species cultivars.